If the first two limitations are satisfied, the promise must be tested upon which the equitability of the promisor to revoke the promise made. As it can be seen in the case D & C Builders v Rees where the debtor’s wife deliberately made the creditor to accept the part payment in the event of their financial difficulty does not entitle the creditor to be estopped from claiming the outstanding amount. The condition was inequitable since the creditor was forced to accept the part payment and therefore, the court held in the favour of them that the unpaid amount should be enforceable. Conversely, in The Post Chaser, reliance of the promisee and whether he had acted on that basis was determined. If the promisee has acted upon the reliance to the contract and if there was detriment, it would be inequitable for the promisor to withdraw his promise. Thus, when the promise was withdrawn within a reasonable time and the reliance does not constitute to a detrimental condition, it is not inequitable for the promisor to revoke the promise made.
The reliance of the promisee on the representation or promise given was to be binding if it was believed as intended to be legally binding and will be acted upon and in reality was acted upon. The promise or representation made must be of that intended to affect the legal relationship between the parties. Referring to Woodhouse AC Israel Cocoa SA v Nigerian Produce Marketing Co Ltd where the facts did not state any clear and unequivocal promise or representation that the existing legal rights of either party or both parties will not be fully enforced. A clear and unambiguous representation was illustrated in Hughes v Metropolitan Railway. When the parties entered into negotiation of the sale of the property, the suspension of the notice of repair was treated as though it was binding and the promisee has acted upon it by not carry out any repair activities to the premise.
The fifth limitation for this doctrine is that the general cases of promissory estoppel were suspensory in effect. In Hughes v Metropolitan Railway, it has been an implied term that, when the parties enter into a process of negotiation, the previous notice of repair would defer until the negotiation ends. On the other hand, it may seem to be absurd and vague as to when this effect would come into force. Although it was shown that in High Trees that it was fair for the effect to take place, it was uncertain if all cases should be given the same meaning as stated. Should a promisor who gave a promise with indefinite term able to withdraw their promise by merely a notice, would it be detrimental to the promisee that relied and acted upon the promise? However, it was argued that the effect of promissory estoppel should depend on the nature of the promise where previous promises should be of suspensory or total termination in effect. But, the condition and nature of the promise does not take into account the existence of consideration of the promise thus, instead of avoiding deteriorating the doctrine of consideration, it added more weight to wipe out the doctrine of consideration altogether.
AUSTRALIA
Equitable Estoppel in Australia
The Development:
Since High Trees in 1947, the promissory estoppel development has raised a number of discussions as discussed above. The Australian Courts had hesitated in approving the doctrine until 1983 where the English law promissory estoppel, which has developed a number of limitations, was recognised. It was well accepted that the promissory estoppel started in Legione v Hately where the court applied promissory estoppel in the effort to enforce representations of existing contractual relations. However, ironically, the Australian has gone far beyond to develop the promissory estoppel in the Australian Law. The most significant progress has been in Walton Stores (Interstate) Pty. Ltd. v. Maher (hereinafter known as “the Walton Stores”) where the case involves both promissory and proprietary estoppel. The defendant, Walton Stores in this case, through their solicitor, delivered their interest in the land owned by the plaintiffs, the Mahers, and, the Mahers’ solicitor replied a “by way of exchange” to execute the lease. The plaintiffs, believing that the defendant has the intention to form a binding contract to hire the land as long as they fulfils the conditions, went on to act upon it.
Although the English Law promissory estoppel does not provide for the application of this doctrine in a condition where there is no existing legal affair between parties of the promise, the Australian Court has come to a decision where the scope of this doctrine in were broaden. The principle of the doctrine was stretched further to the extend where in the process of negotiation, where the offeror has made it a point that the contract will be entered if the offeree performed the specified performance. Since the plaintiffs have relied on the defendant’s promise for the rental and went on to demolish their existing building and replacing it with the specified building as required by the defendant, it would be inequitable for the defendant to withdraw the promise later. As Mason CJ and Wilson J have delivered in their judgement, that promissory estoppel may be resulted in the circumstance where the promise was made by the promisor voluntarily.
The defendant has the obligation to inform the plaintiffs as soon as possible when they had hesitation on the lease of the land. The failure of the defendant’s part to inform the plaintiffs and allowing them to proceed with their detriment was unacceptable. Brennan J, in his judgement, stated that although the promisor was not compelled to fulfil the expectation of the promisee in future legal relationship, it is an obligation for the promisor to avoid detriments in the event the expectation was unable to be fulfilled. The extension of the equitable estoppel allows the law to provide assistance whenever the other areas of contractual law provisions were limited. The objective of this doctrine to promote fairness and overcome the injustice in the doctrine of consideration is well developed here. The English Law on the other hand, has reserved to the traditional scope of estoppel where it was unable to evade unfairness in some cases. If the Walton Stores has taken placed in the United Kingdom where the court has reserved to expand the existing doctrine, unfairness to the plaintiff might occur as they did not falls within the conditions for promissory estoppel to be enforced. It seems to suggest that the English Law should stop restraining from moving forward from the limitation of the doctrine.
The equitable estoppel aim, as the word equitable used, was meant to circumvent the shortage of provision in preventing promisors from causing inequitability by terminating the promise given to the promisee. The law of contract was not drafted perfectly enough in the way that when without the support of consideration justice may not be upheld. It was therefore up to the judge to decide which area of law does it falls and the proper application of doctrines to the cases discussed to avoid unjust. The expectations and reliance of the promisee would be a subjective matter where the court would have to apply some standard measurements in determining the expectations and detriments caused.
However, arguments on reasonable expectation, equality, rule of law and consistency in public law could not have the similar force in contract law. One particular doctrine could not be applied to different areas of law and having similar effect on both sides. It is then arguable that the reasonable expectation due to a relationship in the past could not amount to any right to the conduct in future. A contract and equity created by estoppel concerns different aspects of the law of contract. While a contract is used mainly on enforcing a promise made, equitable estoppel could only be used in prevention of detriments to representee if the representor refused to acknowledge or tried to rebut the promise made.
The court in Australia has tried to separate the doctrine of equitable estoppel from the contract law making it a non-contractual doctrine in nature to stress the equitability of the doctrine. In Legione v Hateley Mason CJ and Deane J divided estoppel into few classes which are estoppel of record, of writing and in pais. Estoppel in pais comprises both common law’s estoppel and estoppel by representation. It was also said that estoppel in pais overlaps the proprietary estoppel and estoppel by acquiescence. The limitation in English promissory estoppel in Jorden v Money was openly rejected in Commonwealth v Verwayen (hereinafter known as “Verwayen”). In Verwayen, Dean J suggested that the courts ought to “recognise a general doctrine of estoppel by conduct which encompasses the various categories of ‘equitable estoppel’ and which operates throughout a fused system of law and equity”. However, although Dean J stressed on the idea repeatedly, it was neither practised nor recognised in other cases where the judges continues to distinguish between equitable estoppel and estoppel by representation. If a distinct drawback of the Australian doctrine of equitable estoppel was to be stated, it would be the question on the relationship between the doctrine and the estoppel by representation. If the English courts were to pick up this doctrine, this will be the main issue to be coped well to avoid disputes.
THE UNITED STATES OF AMERICA
Promissory Estoppel in the United States of America
The doctrine of promissory estoppel has established in the United States of America for a significant period of time and has developed a lot ever since. Just like the English and Australian estoppel, the American promissory estoppel consists of certain elements to be satisfied in order to exercise the doctrine. These elements includes, (1) a plain and unambiguous promise, (2) where the promisor must have anticipated that the promisee would relied upon the promise made and that the reliance of the promisee changes their legal relationship, (3) that the break of the promise would be detrimental to the promisee, and that injustice or inequality would occur if the promise was to be invalidated.
In the early practise of the doctrine of promissory estoppel in America, the main concern was usually gift promises where the doctrine of consideration was unable to apply on these cases. Since the elements of promissory estoppel do not require the doctrine of consideration, the application of this doctrine would be able to maintain fair dealings when it comes to gifts and charitable promises. Ever since the establishment of the first Restatement of Contracts, Section 90 allows the court to protect non-contractual parties for acts of detrimental reliance. In the early development of the doctrine, it was stated by Cardozo CJ in Allegheny College v National Chautauqua Bank that promissory estoppel was only restricted to charitable contribution cases. Most of the cases engaging promissory estoppel revolve around family and charitable subscription condition. Contrasting to the English promissory estoppel, the doctrine was applied wide enough in the sense that: as long as there was an existing legal relationship and the promise entered has altered that position, promissory estoppel will be able to be applied, regardless of what was the subject matter in dispute.
The American judges had been rather constraining in the early 1930s to extend the use of this doctrine in other area other than charitable contribution. In 1933, Judge Learned Hand held in the case James Baird & Co v Gimble Bros (hereinafter known as “Baird”) that promissory estoppel was not meant to be applied in a commercial case. Incidentally, the case leads the promissory estoppel to a higher stage where the focus slowly moves to the commercial area. Promises given to local dealers of franchises and contracts bidding became the centre of promissory estoppel cases. Judge Hand, who had refused to apply promissory estoppel in Baird eventually submitted to the broader usage of the doctrine. Along with the development of the doctrine in the marketplace, employment-related claims were raised and justice was able to be upheld.
However, most academics find the first Restatement to be ambiguous in nature and a second refined Restatement was published in 1981. The Section 90 of this Restatement became the most widely discussed section among the other sections in the Restatement. The three elements of the promissory estoppel were well stated in the refined Restatement and subsequently being recognised in the whole American jurisdiction. The refined Restatement had solved the ambiguity of the previous statement hence, allowing justice being preserved. Estoppel had since evolved into different stages all over the American jurisdiction. The first stage of the estoppel which revolves around equitable estoppel has moved on to the contract stage where promissory estoppel was accepted in replacement of consideration. Yet, the substitution of consideration raised a similar question as to the English promissory estoppel where the doctrine seems to be an alternative to consideration. If the English law were to adopt the American doctrine of estoppel, it would be awkward for the American law practices a wider scope in dealing with estoppels. In some American jurisdiction, promissory estoppel has moved on to the tort stage where it was treated as an independent source of legal obligation rather than being part of the contract law. The equity stage, where few of the jurisdictions currently preserve, was the equitable liability of estoppel. The court was given the discretion to remunerate the parties for the doctrine was recognised to be equitable in nature. It was therefore, said that, “promissory estoppel at its most developed stage is an equitable theory”.
The Remedies and Shortcomings of Estoppel
As was stated above, America’s estoppel provides the court to award remedies or compensation according to judges’ discretion where they find it to be equitable in that particular case. However, the remedial flexibility might be giving the judges too much liberty and power in deciding cases. Unlike a typical contractual obligation where the guidelines for remedies were given in the statute, the discretion given to the judges made the law to be vague and causes difficulties when it comes to interpreting the equitability of the remedies to be given. Reliance based damages could have been the most probable remedies given by the court. Then again, it would be hard quantify the lost due to reliance and expectation of promisee upon the promise made. If the English law adopt this aspect of the doctrine, the Parliament or the court will have to come up with a guideline to determine the remedies which would be likely to be able to apply in estoppel cases in general.
Nonetheless, the Section 90 of the Restatement was preferred to be interpreted as having only one remedy to estoppel, which is, by enforcing the promise. If in order to circumvent injustice, the promise has to be enforced, then, the remedies would be regulated in accordance to justice’s requirement. This statement, although allows the expectation of promisee other than reliance-based to be considered for remedy, deficiencies still occur when the court is faced to identify and determine the best and equitable remedy for the damaged party. Though the American has developed a far more established principle for the doctrine and succeeded in alleviating the inadequacy of the English’s promissory estoppel, it should be bear in mind that the remedial stage will have to be improved if the principle were to be adopted in the English’s system.
IN SHORT
Comparing to both Australian and American’s estoppel and their development, the English law seems to be too conservative in their legal approach and unable to be in coherence with the present society requirement. If the promissory estoppel were to be in the strict limitations as stated above, injustice may not be able to seek relieve from the law for there is no provision given to govern the rights of the damaged party. It would be very valuable if the English law is able to alleviate the flaw in the current state of promisor’s obligation. Both the countries has proven the importance of a well established estoppel doctrine and now it is up to the English’s legislators and judiciaries to decide on the future of the doctrine. The countries have given the guide and precedent where the English can take up and to work out the defects in both jurisdictions.
BIBLIOGRAPHY
Books
Elliott, Catherine and Frances Quinn. Contract Law. 5th Edition. Pearson Education Limited, 2005.
Poole, Jill. Casebook on Contract Law. 8th Edition. Oxford University Press Inc., 2006.
Smith, J.C. Smith & Thomas: A Casebook on Contract. 11th Edition. Sweet & Maxwell Limited, 2004.
Stone, Richard. The Modern Law of Contract. 6th Edition. Cavendish Publishing Limited, 2006.
Articles
Lon L. Fuller, “Consideration and Form”, (1941) 41 Colum. L. Rev. 799, 806, 810, 812.
Mitchell, Catherine. “Leading a Life of its Own? The Roles of Reasonable Expectation in Contract Law.” Oxford Journal of Legal Studies 23 (2003): 639-665.
Nolan, Donald. “Following in their footsteps: Equitable Estoppel in Australia and the United States.” The King's College Law Journal (2000): 202-223.
Internet Sources
Brereton J, “Equitable Estoppel in Australia: The Court of Conscience in The Antipodes”, 16 March 2007, <http://www.professionalstandardscouncil.gov.au/lawlink/Supreme_Court/ll_sc.nsf/pages/SCO_brereton160307>.
Other Authorities
Section 90, Restatement (Second) of Contract 1981. Promise Reasonably Inducing Action or Forbearance.
Stone, Richard, The Modern Law of Contract, (6th ed., 2006), Cavendish Publishing Limited, 96.
Stone, Richard, The Modern Law of Contract, (6th ed., 2006), Cavendish Publishing Limited, 97.
Poole, Jill, Casebook on Contract Law, (8th ed., 2006), Oxford University Press Inc., 154.
Stone, Richard, The Modern Law of Contract, (6th ed., 2006), Cavendish Publishing Limited, 100, n 148.
Poole, Jill, Casebook on Contract Law, (8th ed., 2006), Oxford University Press Inc., 154.
Smith, J.C., Smith and Thomas: A Casebook on Contract, (11th ed., 2004), Sweet & Maxwell Limited, 262.
Smith, J.C., Smith and Thomas: A Casebook on Contract, (11th ed., 2004), Sweet & Maxwell Limited, 262.
[2001] EWCA Civ 274; [2002] 1 All ER (Comm) 737. The attempt in applying an Australian case, Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 regarding the general category of estoppel failed.
[1966] 2 QB 617; [1965] 3 All ER 837.
[1981] 2 Lyod’s Rep 695; [1982] All ER 19.
Stone, Richard, The Modern Law of Contract, (6th ed., 2006), Cavendish Publishing Limited, 101.
Ibid. Judgement given by Lord Cairns L.C.
Stone, Richard, The Modern Law of Contract, (6th ed., 2006), Cavendish Publishing Limited, 102.
Stone, Richard, The Modern Law of Contract, (6th ed., 2006), Cavendish Publishing Limited, 102.
Nolan, Donald, “Following their footsteps: Equitable Estoppel in Australia and the United States” (2000) Kings College Law Journal 201.
Nolan, Donald, “Following their footsteps: Equitable Estoppel in Australia and the United States” (2000) Kings College Law Journal 207.
Mitchell, Catherine, “Leading a life of its own? The roles of Reasonable expectation in contract law.” (2003) 23 Oxford Journal of Legal Studies 639.
Brennan J, in Walton Stores.
Nolan, Donald, “Following their footsteps: Equitable Estoppel in Australia and the United States” (2000) Kings College Law Journal 208.
Brereton J, “Equitable Estoppel in Australia: The Court of Conscience in The Antipodes”, 16 March 2007, <http://www.professionalstandardscouncil.gov.au/lawlink/Supreme_Court/ll_sc.nsf/pages/SCO_brereton160307>.
(1854) 5 H.L.C. 185; 10 E.R. 868.
Nolan, Donald, “Following their footsteps: Equitable Estoppel in Australia and the United States” (2000) Kings College Law Journal 209.
Lon L. Fuller, “Consideration and Form”, (1941) 41 Colum. L. Rev. 799, 806, 810, 812.
Nolan, Donald, “Following their footsteps: Equitable Estoppel in Australia and the United States” (2000) Kings College Law Journal, 214, n 74.
Nolan, Donald, “Following their footsteps: Equitable Estoppel in Australia and the United States” (2000) Kings College Law Journal, 214, n 80.
Nolan, Donald, “Following their footsteps: Equitable Estoppel in Australia and the United States” (2000) Kings College Law Journal, 214, 215.
Nolan, Donald, “Following their footsteps: Equitable Estoppel in Australia and the United States” (2000) Kings College Law Journal, 218.
Nolan, Donald, “Following their footsteps: Equitable Estoppel in Australia and the United States” (2000) Kings College Law Journal, 218.
Section 90, Restatement (Second) of Contract 1981. Promise Reasonably Inducing Action or Forbearance.
Nolan, Donald, “Following their footsteps: Equitable Estoppel in Australia and the United States” (2000) Kings College Law Journal, 219.
Nolan, Donald, “Following their footsteps: Equitable Estoppel in Australia and the United States” (2000) Kings College Law Journal, 222.